The result of heritage at any price

The next step in the fracas that the future of the Harcourts building in Lambton Quay has become is likely to result in Wellington’s own version of the Marie Celeste, that abandoned ghost ship of the Atlantic.

After all the to-ings and fro-ings to get the only commercially viable option of demolition and rebuilding approved, the owner has pulled the plug and intends to cordon off and abandon the building for safety reasons because its heritage value is apparently unique but unaffordable to retain.

Since then, the building has spawned an industry of Wellington property professionals, economists, architects, commercial real estate agents and lawyers dedicated to advising on the future of the building.

Almost all, except the city council and the New Zealand Historic Places Trust, say the only solution from safety, heritage and economic aspects, is demolition and redevelopment.

The building is currently uninsurable, and if restored to an acceptable quake standard of 80 per cent of building code the premium per year is quoted as $455,000 plus GST.

Based on my experience, that cost will keep increasing.

The building’s owner, Mark Dunajtschik, has spent more than $500,000 getting professional opinions on its future. It would cost $10.8m to bring the building up to 80 per cent of the standard, with the option of demolition of the building and retaining the facade estimated at $6.5m.

Due diligence has been done by outside parties on renovating the building into apartments, converting it to a hotel and student accommodation. All declined to progress their options and all said the two strengthening and refurbishment options were not commercially viable.

Among this fracas Mark Dunajtschik offered the building for $1 to the council, the Government and the Historic Place Trust. As a further incentive to address their strident views on the heritage value of the building, he also offered the Historic Places Trust an additional $5m towards strengthening and refurbishment.

Despite media comments, they all declined the offer. They were not prepared to spend their own money on the building.

So the building sits empty was an abandoned wreck. What a triumph for heritage.

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Comments (42)

gazzmaniac

I could almost understand if it was a unique building. But if it’s an example of Chicago architecture, there is a whole city full of that style in Illinois. If people really want to see it they can travel there.

If it is not economically viable to restore it, it should be able to be demolished and something else built in its place.

Manolo

peterwn

Similar almost happened in Napier several years ago. In the 1932 earthquake the Cathedral collapsed but a brick hall behind somehow survived although with large cracks in the brickwork. Several years ago the cathedral authorities wanted to demolish it, and some disgruntled person went screaming off to the Historic Places Trust who tried to slap a heritage order on it. Goodness knows why, it was sandwiched between the new Cathedral and Tennyson Street buildings so was not a landmark building. Presumanly the Trust thinks money grows on trees. Following that incident I did not renew my membership.

peterwn (2,486) Says:
October 11th, 2013 at 12:19 pm
Similar almost happened in Napier several years ago. In the 1932 earthquake the Cathedral
****
No desire to create a diversion, but since my grandfather was involved as a contractor in the construction of the wrecked cathedral, I have long had an interest.

Peterwn is absolutely correct. The dilly Anderton/Burden moves on the ChCh Cathedral are of this “magnitude”.

The problem lies with BOTH the incompetence of elected officials, and flawed legislation. As Outside The Beltway said in a paper dealing with Local Government and Localism, published just a few days ago:

**** ” … Having been elected, Mayors, Chairmen, Councillors, and others are promptly absolved of any responsibility, and electors effectively dis-enfranchised, by legislation that delegates virtually all decision making to a Chief Executive, who in turn appoints all staff. And by councillors with limited competence as governors failing to take control. There is therefore a fundamental disconnect between ratepayers and local government, to the extent that one mayor says his CEO must be paid more than $800,000 pa “to meet the market”. The folly inherent in the present, and even as it will be in the amended legislation, is thus apparent. Worse, local government is underwritten by taxpayers. …”
***

mikenmild

All the court desision really says is that the judge is not convinced that the owner has properly examined all options for the building’s redevelopment. Perhaps if he restarts his application to demolish with a more thorough assessment he will get a different result.

Rowan

What a joke, this should be the owners decision and not the historic places trust or as in the case of the Christchurch Cathedral, Jim Anderton and the ‘save the cathedral brigade’
Flipper
Is the OTB piece available online anywhere, it would be interesting to see, really enjoyed the previous one on Judith Collins & Justice Binnie et al.
I have an interest in the Christchurch Cathedral one as am descended from those involved in its design.

gump

I’m finding it hard to get upset about this.

Property investment carries a number of risks, and any competent property investor should have understood that buying a heritage listed building with a 4% building code compliance was a mind-numbingly stupid thing to do.

slightlyrighty

Gump.

Buying a building with 4% of building code may not be a good investment in your eyes, but that site is commercial gold. The problem at hand is those who seem intent on preserving history at the expense of commercial realism. That site should be freed up for a more appropriate development. Wellington is not blessed with an abundance of land and we must face the facts that retaining all our heritage comes at a cost. Those who wish to keep it, should fund it, and not place the owners under duress as they are doing in this case.

gump

@slightlyrighty

I entirely agree that heritage comes at a cost, and that cost is reflected in the discounted price that heritage properties are traded for.

The site will only become “commercial gold” if the current building is removed. But the owner purchased the building knowing that it carried an “Historic Place Category 1” rating and could never be demolished or significantly altered. It’s important to realise that the building gained it’s HPT classification in 1990 – so nothing has changed during its current ownership.

RRM

Among this fracas Mark Dunajtschik offered the building for $1 to the council, the Government and the Historic Place Trust. As a further incentive to address their strident views on the heritage value of the building, he also offered the Historic Places Trust an additional $5m towards strengthening and refurbishment.

Despite media comments, they all declined the offer. They were not prepared to spend their own money on the building.

Of course not. Telling other people how they must spend their own money is how Historic Places rolls…

It is indeed a must-read piece about which I blogged earlier today DPF. I am involved with an organisation here that is caught up in a battle over earthquake strengthening. The battle is between the local council, and the organisation’s national body which wants a higher standard of code compliance than the Wanganui District Council requires. To achieve that, it’s going to cost something in the region of $5m, and that’s rising all the time.

I can understand everyone being conservative given likely liability issues in the wake of the Christchurch earthquake. But the stoush over the Harcourts building has brought this dilemma into focus, and that’s a very good thing.

RRM

It seems to be reasonably feasible to retain the facade of the historic building, and build your 25-storey tower inside. Thereby keeping the heritage policy socialists happy while still getting your money-making 25 storey tower. Look at Kirkcaldie’s. Look at the apartment block now under construction on the old Bresolini restaurant site on Tory St. Look at One Market Lane.

Mr Dunajtschik gambled when he bought it cheap, knowing its condition and heritage status.

IMO he is trying to pretend he’s gambled and already lost.

In the hope that an unholy alliance of heritage policy socialists who want old stuff saved at any cost (so long as it’s somebody else’s cost) and “councils BAD” talking heads like DPF who feel sorry for the poor maligned property speculator, will pressure the council into stumping up some money to make his investment even better.

Michael

I’ve been in the building a few times. It’s laid out for the old style everyone in an office style and not able to be properly used as a open plan office. Demolishing and rebuilding a modern building retaining the facade is the only practical option to retain the heritage features.

I think the most ridiculous heritage building in NZ is the shed on Auckland’s Queens Wharf. It’s a corrugated iron shed with no architectural features at all. And yet we had the anti progress brigade demand retention. It’s a shame such a small minority can hold the rest of us to ransom.

Manolo

greenjacket

I just walked over and had a look at it.
The exterior is not at all attractive or unique and is clearly a significant hazard in an earthquake. The interior is very old and dark and dingy – on impressions alone, it is very unattractive commercially, and would be a very great risk in an earthquake.

The building is not viable, and even retaining the facade would be a major risk – rip it down now before people are killed in it.

Alan Wilkinson

greenjacket

The interior decor is 1930s marble and dark wood panelling in an art deco style and it will be a loss to see that go, but the exterior is uninspiring. Theere is no point in retaining the facade at all, but the marble and wood panelling lobby (which is potenially very nice) could be removed and put back into a new building on the site.
But there are large cracks all through the building – it is an obvious and imminent risk. I walked around it, with the large cracks in the walls I felt the whole place could go – if there was an earthquake, it would just collapse completely. The Council have plastered warning notices all over it, and MFAT (the neighbours) have notices telling people not to enter it because it is such a risk. Seriously – it is a very major risk – people will get killed in this building, and it sits astride the narrowest and busiest part of Lambton Quay.

The Historic Places Trust should be seriously condemned for their ridiculous attitude.

Ross12

Dunajtschik will win this. Those who say he took a gamble and should have known what he was getting into — well he win the gamble. He will have on going rates costs but ultimately the whingers will have to give in unless they want to wait until the next “big one” or allow what will turn into an eyesore, develop. Then Dunajtschik will have the valuable piece of land.

holysheet

gump

If the HPT buckles in this case, they’ll create a precedent that will encourage property owners to avoid strengthening their buildings. Why strengthen a building when you can neglect it, demolish it, and unlock the land value?

OneTrack

“It’s therefore important that the HPT hold their line.”

What line is that? That old buildings are more important than anything else, including the lives of people walking past the thing in an earthquake prone area. That there is no point trying to talk logically to the HPT because they just don’t care?

wreck1080

gump

@OneTrack

“What line is that? That old buildings are more important than anything else, including the lives of people walking past the thing in an earthquake prone area. That there is no point trying to talk logically to the HPT because they just don’t care?”

—————————–

The only person that doesn’t care is the building owner.

By not spending money to strengthen the building, he is the person who is placing the lives of passersby at risk.

BigFish

The building was heritage listed when he purchased it.
The developer has just jumped on the Christchurch demolition bandwagon. The cost of strengthening to the required standard (33%) is substantially less than the 100% cost that keeps getting quoted.

When the HSBC tower next door (same owners) was approved for construction it was approved partly on the condition that the Harcourts Building be refurbished and retained. The new tower isn’t exactly beautiful.
The pounding risk to the newer tower quoted is interesting given that an equally brittle and heavy heritage facade is incorporated in to that tower where it meets the Harcourts Building’s facade. If the developer built the new tower too close then that was the developer’s own decision.

The developer also encroached on the older building’s lightwell and the airspace above it. Anything that’s been done to reduce the value of the Harcourts Building is the owner’s own doing, including the constant talk of it being worthless.

There are plenty of average ’70’s and ’80’s buildings that the public would love to see replaced (some might even be bigger quake risks). How about the Burger King building opposite Midland Park for starters?